Outlook for Next Week
Week of December 18th, 2023
Good afternoon folks,
The market had an extremely bullish week as the market climbed another ~150 points, which puts us a stone’s throw away from all-time highs. CPI and FOMC (especially FOMC) sent the market into a parabolic move up, stopping only at 4745, a hard resistance.
We were bullish all week in The High-Roller Room, as the market showed no signs of weakness or even slowing down. When the market doesn’t show any signs of weakness, don’t get ahead of yourself, it’s dangerous to fade. We simply followed the trend and stayed on the right side of momentum, which proved to be incredibly rewarding.
Here are the results from last week’s outlook:
The market was even more bullish than our bull scenario, shooting far above as shorts were mercilessly squeezed. We stayed above our key level 4560, so there was no reason to be bearish. Let’s outline next week:
Outlook for Next Week
I trade the S&P 500 index daily and use supply/demand levels as my main strategy. I focus on a handful of core setups within these levels (found here) which typically appear 1-3 times a day. I take one or two trades a day, targeting gains of 10-30 points. My objective is to maintain consistency and leverage it, rather than trying to get as many points as possible.
Next week will be less intense news-wise than this week, although this doesn’t mean the market will be less volatile. Last week was critical in determining market direction for the next few months, and next week will be critical in confirming it. The end of the year is coming, and major decisions will be made on both sides.
The key level for next week is 4700. I suspect next week will not be a week of clean, quick price action. We have strong bullish momentum pitted against heavy resistance. It will probably take some time for the market to consolidate before moving in a direction. We have a few clear scenarios set up:
Top-Setter: This assumes that 4745 holds as a resistance level and 4700 fails as a support level. We could shoot above 4745, but we’d need these breakouts to fail and start moving toward 4700. Once 4700 breaks, the pullback begins to 4685 and below.
Breakaway: This assumes 4700 holds as a support level and 4745 breaks. In this case, we can expect more explosive upward action. The longer we consolidate and don’t break under 4700, the more likely this is to happen. Above, we’d be targeting 4760 and higher, possibly 4800+.
That’s all for this week’s outlook. All of this will be updated and executed in real-time in The High-Roller Room (click here to get access). Stay sharp.
Disclaimer: Investing in stocks, bonds, futures, options, and other securities carries significant risks. Some or all capital may be lost. With leveraged instruments, losses may exceed initial capital. Past performance of a security does not guarantee future results. Any content from this newsletter should not be taken as financial or investment advice, but for informational and entertainment purposes only. This newsletter simply shares my personal opinions and notes. Consult with a registered financial/investment professional. This newsletter and its authors are not licensed financial/investment professionals. By reading and using this newsletter, as well as any other publications, you are agreeing to these terms.